STMicro rejects call to let shareholders vote on Italian board candidate, sources say
A logo is pictured on the factory of STMicroelectronics in Plan-les-Oautes near Geneva, Switzerland, December 6, 2016. REUTERS/Denis Balibouse
ROME (Reuters) -STMicroelectronics has rebuffed a fresh Italian government attempt to appoint its candidate to the chipmaker's supervisory board, two sources familiar with the matter told Reuters on Wednesday.
The Italian and French governments indirectly own a combined 27.5% stake in STMicro but Italy is increasingly unhappy with CEO Jean-Marc Chery and wants Paris to join efforts to replace him. However, the French government is standing by Chery.
STMicro employs 50,000 people worldwide and has seen demand for its products hurt by a sustained downturn in its key automotive and industrial markets.
Earlier this month, STMicro's supervisory board rejected the nomination to its ranks of Marcello Sala, who was head of an Italian economy ministry department responsible for state-backed firms before he resigned on Wednesday.
But Reuters reported on Tuesday that Rome, keen to have more influence at the chipmaker, would not back down and had made a request to the board to call an extraordinary general meeting (EGM) to let shareholders decide on the appointment of Sala.
Asking not to be named, the two sources said on Wednesday that the board had rejected the call for the EGM, without giving further details.
The company did not reply to a request for comment.
As a close aide to Italian Economy Minister Giancarlo Giorgetti, Sala helped the government deal with some of its most delicate corporate issues, including the re-privatisation of bailed-out bank Monte dei Paschi di Siena.
STMicro's annual general meeting (AGM) on May 28 will vote on the appointment of Simonetta Acri, championed by the Italian industry ministry, to the supervisory board. However, it is too late to amend the agenda in order to vote on Sala, hence the request for the EGM.
(Reporting by Giuseppe Fonte; Editing by Kirsten Donovan)
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